Petrol levy cut by Rs. 1.65 for consumers as refineries shoulder Rs. 16.36 per litre

The federal government has reduced the petroleum levy charged to petrol consumers by Rs. 1.65 per litre, shifting more of the burden to refineries while keeping its total levy collection unchanged. The adjustment comes under a revised petrol pricing formula introduced approximately two weeks ago.

Consumers now pay Rs. 63.64 per litre in petroleum levy, compared with Rs. 65.29 per litre previously. The change is intended to give petrol buyers additional relief by reducing the portion of the levy they pay directly.

Refineries are now absorbing Rs. 16.36 per litre under the revised arrangement. Combined with the Rs. 63.64 charged to consumers, that contribution preserves the government's full petroleum levy collection of Rs. 80 per litre.

The mechanism therefore changes how the levy is divided between petrol buyers and refineries, rather than reducing the levy itself. The government's stated purpose in introducing the formula was to ease the direct burden on consumers without giving up petroleum levy receipts.

Refineries were also assigned a role in containing petrol prices in an announcement dated 7 November 2026. The government said they would absorb an estimated Rs. 15 billion each month to help prevent a Rs. 15-per-litre increase in petrol prices.

The federal government's separate fuel-price revision on 26 September 2026 had raised the ex-depot petrol price by Rs. 2.02 per litre, from Rs. 389.28 to Rs. 391.30. High-speed diesel moved in the opposite direction, falling by Rs. 3.59 per litre to Rs. 408.53. Those rates applied from 26 September 2026 to 28 September 2026 under the petroleum pricing mechanism.

Earlier, on 6 August 2026, the federal government announced cuts of Rs. 3.19 per litre for petrol and Rs. 1.50 per litre for high-speed diesel, with the revised rates to take effect from the notified date. The government attributed those adjustments to movements in international oil prices and other relevant economic factors. The reductions were expected to ease transport expenses and offer some relief to households, businesses, motorists and fuel-dependent industries facing rising living costs.